C of E in ‘ticklish’ position over its Murdoch shares

by

13 July 2011

by Ed Beavan

THE Church of England was in a quan­dary this week over its £4-million holdings in Rupert Mur­doch’s News Corporation, embroiled in the phone-hacking scandal.

On Wednesday, News Corporation withdrew its bid for the remaining 61 per cent of shares in BSkyB, after strong pressure from the leaders of all main political parties. On the same day, the Prime Minister announced that he had appointed Lord Justice Leveson to chair an inquiry into the behaviour of the News of the World, closed by Mr Murdoch last weekend.

In a strongly worded statement issued at General Synod on Saturday, the C of E’s Ethical Investment Advisory Group (EIAG) revealed it had written to News Corporation, the parent company of the news­paper, in which the Church Commissioners hold 344,586 shares, worth about £3.8 million before the scandal struck.

In its letter, it described the behaviour of the News of the World as “utterly reprehensible and unethical”. The decision to close the News of the World, while welcome, was “not a sufficient response to the revelations of malpractice at the paper.

“Nor does it address the failure of News International [the subsidiary that owns UK newspapers such as the News of the World, the Sun, and The Times] and News Corporation executives to undertake a proper investigation and take decisive remedial action as soon as the police uncovered illegal phone hacking in 2006.”

The EIAG called for News Corporation to take “all necessary measures to instil investor confidence in the ethical and governance standards of News Corporation”, and said that it could not “imagine cir­cumstances in which we would be satisfied with any outcome that does not hold senior executives to account at News Corporation for the gross failures of management at the News of the World”.

The Commissioners would now consider withdrawing their invest­ments in the company, should the organisation not “hold senior executives to account”.

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During Church Commissioners’ questions, however, the First Church Estates Commissioner, Andreas Whittam Smith, admitted that premature sale of the shares would be “very bad”. It was “a ticklish area”.

The EIAG had been quick to consult James and Rupert Murdoch, he said, but the situation “won’t be easy, and I won’t volunteer to be part of the team”. Mr Whittam Smith was founding editor of The Independent.

In a press conference in York, the Revd Professor Richard Burridge, Dean of King’s College, London, and deputy chairman of the EIAG, clarified that while it welcomed the closure of the News of the World, it regretted the fact that about 200 staff had been made redundant.

“To read it as saying we are glad that they are losing their jobs is a misreading of it. If there is going to be another Sunday paper, we hope that they will find jobs in that.”

He said that the Church had felt it right to invest in the media and newspapers seven years ago, and their investment in News Corporation was “relatively small”.

He cited the example of Vedanta, the mining company in which the Church of England sold its shares because of human rights concerns.

Professor Burridge said that en­gage­ment with the company would be the first step. “Disinvestment is our ultimate sanction, if engagement does not work. Our engagement actually changes corporate practices. Vedanta weren’t listening; after the Church disinvested, their share price dropped overnight. . .

“I would love to think Rupert Murdoch lies in bed at night quaking in fear of the Church of England, but I fear that may not be the case.”

The Archbishop of Canterbury’s spokeswoman said that it was unlikely that Dr Williams was a victim of phone-hacking. Dr Williams does not own a mobile phone.

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